Tuesday, March 28, 2017

The Acting Chair
of the Federal Trade Commission (FTC), Maureen Ohlhausen, says that occupational
licenses are a “particularly egregious example of this erosion in economic
liberty” and she recently implemented a task force at the Commission to help
reduce the burden imposed by occupational licenses.

In a speech
at the George Mason Law Review’s 20th Annual Antitrust Symposium, FTC
Acting Chair Ohlhausen discussed how unnecessary occupational licenses can have
a negative effect on consumers:

The public safety and health rationale for regulating
many of those occupations ranges from dubious to ridiculous. Consumers can, and
do, easily evaluate the quality of interior designers, make-up artists,
hair-braiders, and others. I challenge anyone to explain why the state has a
legitimate interest in protecting the public from rogue interior designers
carpet-bombing living rooms with ugly throw pillows. Market dynamics will
naturally weed out those who provide a poor service, without danger to the
public. For many other occupations, the costs of added regulation limit the
number of providers and drive up prices. These costs often dwarf any public
health or safety need and may actually harm consumers by limiting their access
to beneficial services.

In response to the
proliferation of unnecessary occupational licenses that has occurred throughout the United States, Acting Chair Ohlhausen
created the Economic Liberty Task Force with a particular focus on occupational
licensing regulations. The Task Force will work with Governors and state and
local leaders to analyze how such regulations impact competition and consumer
choice.

In a July
2015 blog, I specifically discussed how Maryland’s occupational licensing
regime is harming poor people in two ways. First, the licenses restrict labor competition,
harming poor entrepreneurs who cannot afford the mandated training and
licensing fees. Second, the reduction in labor competition increases prices that
disproportionately harm the poorest consumers. Of course, occupational licensing
harms all consumers with higher
prices and lower productivity because the barriers to entry created by licenses
discourage competition from outside entrepreneurs.

Thank you to FTC Acting
Chair Maureen Ohlhausen for creating the Economic Liberty Task Force. Hopefully,
Maryland and other states will work with the Task Force to reduce the overall
burden of occupational licensing.